Question: EPS next year is expected to be $6.20 for WIL, Inc. WILs dividend payout ratio is 40% and its dividend growth rate is expected to

  

  1. EPS next year is expected to be $6.20 for WIL, Inc. WIL’s dividend payout ratio is 40% and its dividend growth rate is expected to be 5.4%. WIL’s price-earnings ratio is 9.50
    1. Compute WIL’s stock price.
    2. Compute WIL’s required rate of return (market capitalization rate).
    3. What is the value of WIL’s PVGO?

Would you recommend that WIL increase, decrease, or leave unchanged its plowback ratio?

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